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Author: hompluem Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 12284  
Subject: BryanMorgan-- its TIME, not timing... Date: 3/8/1999 4:09 PM
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:)First, congrats to EMC longs on a GREAT, GREAT day!!!

BryanMorgan:
I'm just trying to provide a contrarian argument to this "Buy at any cost" philosophy. It might work well with giant, global conglomerates, but not with tech stocks. (Look back at the dominant players in this field 5, 10, 20, and 30 years ago to witness the changes.) You can't time the market, but I'd say that it's probably wiser at this point in time to build up a sizable cash position then gradually average into the stock, doing your best to buy on dips. The true long-term investor looking for superior returns is like a good baseball hitter: he/she always waits for the pitch. If it doesn't come, wait for the next one. As
Warren Buffett has said, you only have to make a very few great decisions in your investment lifetime as long as you don't make many bad ones.


Fundamental issues aside, I agree with you to a certain extent…buy on weakness and not into strength. But waiting for that dream dip could be costly. If one were planning to buy EMC, why not buy some now, and perhaps some more on that dip if it comes? I call it nibbling, and essentially it is the dollar cost averaging you are talking about. That dip may come, or perhaps you will never see 80 again. And if we do see 80, GOOD! That will present us with another buying opportunity. Here's a little piece that I have previously posted on another board that I want to share with you folks:
----------------------------------------------------
{Don't laugh, its from Louis Rukeyser's newsletter.}

$803,318

Hidden within the number above lies a remarkable lesson on the most important investing principle of all - a lesson that should make even the most diehard procrastinator change his ways.

It all starts back in the early 1960s with Ralph, the single unluckiest investor in the entire world. Starting in 1963, he put $2000 once a year into the stocks that comprise the S&P 500 index - -but his time was so terrible that he chose the worst day of the year every time! Incredibly, he invested at the exact top of the market every year and kept it up for 10 years, (After that, he let it ride.)

As of January 1, 1999, his total of $20,000 would have grown to $803,318.

But Ralph's brother in law Darth started investing $2000 a year in 1973, right after Ralph quit. To everyone's astonishment especially Ralph's, Darth turned out to be the world's luckiest investor. Every year, he picked the absolute bottom of the market to plunk down his $2,000. And to stack the odds in Darth's favor even more, he kept up his stupendous performance for 20 years, investing twice as much and twice as long as Ralph.

Guess what? As of that same January, 1, 1999, Darth's 40 grand would be worth $24,839 less than Ralph's stake-- $778,479 vs. $803,318. Imagine, Darth put in twice the money and his annual return was higher, yet Ralph licked him fair and square.

Moral: Forget market timing! Timing and luck are nice, but you can make more money just getting started now. It's time- not timing, that is going to make you rich. Worrywarts so scared of a market drop that they do nothing are making a big mistake.
---------------------------------------------------

And here's the quote from the GREAT Peter Lynch, "Far more money has been lost by investors trying to protect themselves from market downturns than has been lost in downturns themselves."

FWIW, I strongly feel that 110 is a decent price…perhaps not the best price, certainly not as good as the sub-100 just a week ago, but a year, 2 years, or 5 years from now-it is a VERY GOOD price. For newbies out there, if you have done your homework and believe in a company's fundamentals-why not nibble a bit?

BTW, Warren Buffet bought KO after it already had a very impressive run and when everybody thought it was TOO expensive. For him, it was cheap when nobody else saw it that way.
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